Business.govt.nz

Operations strategy overview

Your business’s operations are all the resources, processes and systems needed to create your products and services. Improving your operations strategy can help your business run more smoothly, get a competitive advantage, and be more sustainable in the long term.

Our quick self-assessment tool will help you reflect on your current operations and our interactive tools and pages will help you think strategically about your operations.

Check out the topics and the interactive tools available in this section. Use the links or the navigation pane to browse through the pages and tools.

Self-assessment: Operations

Being strategic about your operational efficiency, inventory, networks, capacity and quality helps to take your business to the next level. Find out what you’re already doing well and where you could improve your operations.

At the end of this assessment you’ll get:

a better idea of your strengths and weaknesses

practical tips and tools

links to expert advice.

5-10 minutes

Self assessment: Operations

Efficiency

Did you know...

If your business is in a low growth market with mature products and services, operational innovation is the only way to get ahead of competitors, according to Michael Hammer, operational innovation guru.

The right time to focus on efficiency and innovation is when:

I’m just starting up my businessI’m beginning to refine my products or servicesMy products or services are competing in a stable marketMy business is competitive and my processes are matureMy business and processes are mature, and I know exactly what my customers expect

Efficiency

Did you know...

Companies of all sizes have achieved extraordinary improvements in cost, quality, speed, profitability, and other key areas by focusing on, measuring, and redesigning their customer-facing and internal processes — Michael Hammer

Inventory

Did you know...

Inventory is the largest asset many companies own, according to Investopedia. Working out the most economical amount of inventory to order each time can help free up cash for other things.

I’ve weighed up the pros and cons of storing inventory (stock).

No — I don’t need any inventoryNot really — but I make sure I keep what I need handyYes — I’ve thought about which items are best to stockYes — I’ve weighed the cost of storage against the potential cost of missed salesAbsolutely — I’ve considered costs, benefits, and implications, so I can maximise profits and lessen risk

Inventory

Did you know...

Businesses carrying excess inventory pay around 30% more in costs each year compared with companies operating at optimal inventory levels, according to The Retail Owners Institute.

I always order the optimal amount of inventory.

Not really — I sometimes have too much or run outI try my best but it’s hard to calculateI order enough to meet customer demand, but I’m not sure if that’s ‘optimal’ Mostly — I balance having enough with keeping my costs lowAbsolutely — I calculate demand, ordering costs, and holding costs to order the optimal amount each time

Networks

Did you know...

Outsourcing more than 15 to 30% of a firm’s innovation activities becomes challenging for maintaining the effectiveness of the organisation, according to the Centre for European Economic Research.

I’m sure about which parts of my business to outsource and which to keep or bring in-house.

I don’t outsource because I prefer to stay in controlI’m not sure which things I should outsourceI outsource some things, but I don’t know if they’re the right thingsI outsource things that aren’t my core strengthsI deliberately outsource to optimise cash flow and focus on things that give me a competitive advantage

Networks

Did you know...

Government standards state that all contracts must comprehensively specify your requirements in a concise, easy-to-understand way that provides the supplierwith all the information it needs to deliver successfully. — NZ Government Procurement

I know what makes a good contract and how to negotiate what goes into one.

I don’t have contracts with anyoneI have contracts but I don’t really read themI trust that the contracts I sign are fairI read and sometimes ask to change the contracts I signI protect my business by always negotiating sound, clearly written contracts

Capacity

Did you know...

What gets measured gets managed. — Peter Drucker, management expert

I know how much customer demand exists for what I sell.

I’m not sure how to measure demandI judge demand by how busy my business isI judge demand by how busy my business is and my competitors areI judge demand by talking to customers, competitors, and suppliers I regularly measure and forecast demand — it's documented and up to date

Capacity

Did you know...

Inadequate or improper capacity management can affect financial performance and hurt business prospects, according to Investopedia.

Throughout the year, I’m able to meet customer demand.

Almost never — there’s more demand than I can meetRarely — I often miss sales opportunities Sometimes — I occasionally miss sales opportunitiesUsually — demand mostly matches my ability to meet itAlways — I adjust capacity to match demand or influence demand to fit capacity

Quality

Did you know...

Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. — Peter Drucker, management expert

I know the level of quality my customers expect.

I wouldn’t know how to judge thatI assume customers want the quality I deliverI know through experience what my customers expectI’ve asked some of my customers what they expect I’ve carefully researched what my customers expect so I can deliver quality every time

Quality

Did you know...

I control the quality of my products or services by:

Just trying to do what I do wellFocusing on what matters most to my customersSetting up measurements to track consistencyTweaking processes based on careful measurementsDeliberately controlling processes and addressing problems, plus training my people to deliver quality

Tell us about your business

Just one last step before your self-assessment results. So we can shape future tools and services around your needs, please tell us about your business size, location, age and industry.